On August 25, 2009, the United States District Court for the District of Maryland issued an opinion in a case that had federal government contractors throughout the United States on edge. The outcome: the regulation requiring federal contractors to use E-Verify will take effect on September 8, 2009.  


The regulation will require the federal government to include a clause in contracts that are awarded after the September 8 effective date requiring contractors to use E-Verify to confirm the identity and employment authorization of all new hires and of any current employees who are assigned to work under the government contract. The regulation will also require subcontractors to use E-Verify. There are a number of exceptions contained in the regulation.  

For a history of the relevant regulation, exceptions to the requirement, and the rule’s delays, see our prior alerts: Federal Contractors to be Required to Use E-Verify; E-Verify Federal Contractor Rule Delayed Until September 8, 2009; E-Verify Federal Contractor Rule Delayed Until June 30; E-Verify Rule for Federal Contractors Suspended Until May 21, 2009; E-Verify Rule for Federal Contractors On Hold Until February 20, 2009; and Federal Contractors Required to Use E-Verify Beginning in January 2009.  

The Opinion

The U.S. Chamber of Commerce and other interested parties had filed a lawsuit challenging the regulation in December 2008, arguing in part that the requirements imposed by the regulation violated the Illegal Immigration Reform and Immigrant Responsibility Act’s (IIRIRA) prohibition against mandating participation in the E-Verify program.  

The court rejected this argument, however, ruling that if “[businesses] wish to enter contracts with the government,” the decision to do so “is a voluntary choice.” The court also upheld one of the more controversial provisions of the new E-Verify rule, which requires that contractors and subcontractors use E-Verify for existing employees who are assigned to the federal contract. The court stated that “nothing in IIRIRA explicitly prohibits the executive branch from using E-Verify for current employees.”